Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

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Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

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Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

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“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

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Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

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Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Rba Rate Decision

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The Reserve Bank of Australia (RBA) has kept the interest rate on hold today at 2.5%. Interest rates have remained at a record low since August 2013.
ME Bank general manager markets, John Caelli, said that the focus from the RBA remains on providing conditions to support business investment and unemployment, with other options for dealing with house price increases.
"The RBA has flagged that measures other than interest rates may be more appropriate to address the issue of house prices," said Caelli.
RP Data head of research Tim Lawless noted that softer readings for housing market conditions over September may have eased some of the concerns that the RBA held about the property market, however the trend does remain strong.
While a 0.1% growth figure was recorded across the capitals for the month of September, the quarter still recorded a 2.9% increase.
He said it will still be important to monitor the trend rate of growth across Sydney and Melbourne.
"Investor interest in these markets has been significant compared with other capital cities and compared with historical ratios of owner occupier loans to investor loans," said Lawless.
"If investor interest in these markets doesn't moderate we can expect the RBA, in conjunction with APRA, to intervene via prudential regulation of the banking sector to attempt to slow down the level of investment lending activity in the market," he said.
This intervention, he suggests, may be higher risk ratings or capital for investment loans.
"In any event, the goal would be to slow the level of speculative investment across the housing market, particularly in Sydney and Melbourne, alleviating the pressure on the RBA to raise interest rates in order to dampen housing market conditions," he said.
Michelle Hutchison, money expert for Finder, noted that all the experts recently asked in their Reserve Bank Survey said that they are expecting a rise on the cash rate next year.
"With a cash rate rise on the horizon, it could be a good time for borrowers to take advantage of the mortgage season promotions currently available by home loan lenders, which could help them get onto the property ladder so they can start preparing for rate hikes ahead," she said.
"We're also still seeing home loan interest rate movements, with 94 fixed home loans that saw reduced rates by as much as 0.70 percentage points over the past month, and 23 fixed rates increased by up to 0.30 percentage points. Interestingly, 27 variable rate home loans have fallen in the past month, by up to 0.30 percentage points from ANZ, My State, IMB, Bendigo Bank, Resi, Suncorp Bank, Wide Bay Australia and State Custodians."
She noted that it's a good idea to compare home loans and promotional offers available, but to be wary of the fees involved.
Caelli noted that today's announcement of a stable rate would be welcomed by borrowers, with a recent ME Bank survey recording 49% paying down their home loan faster with additional payments. Despite this, 42% said they were just managing to pay the minimum requirement.
"While any future rate increases are likely to be gradual, borrowers just managing repayments now will need to make financial adjustments when this happens," he said.
"We're also noticing an increase in borrowers taking out fixed term loans to protect themselves from potential RBA rate increases."
LJ Hooker chief executive officer Grant Harrod said that low rates have assisted in offsetting the fall in mining investment, and that the start to the spring market has been encouraging.
"However, while markets such as Sydney and Melbourne have performed well, there are many other markets which have softened or experience more modest result," said Harrod.
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RBA on hold as they consider other measures to deal with house prices

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Finder.com.au’s Monthly Reserve Bank Survey of 28 leading economists and experts looks to shed some light on interest rates and the thoughts of the Reserve Bank. Here are comments from 10 of their experts on the current rate environment. Jonathan Chancellor, Property Observer
“The recent Sydney house price boom, after years of little growth, is not a sufficient trigger for the bank to make any move. The domestic economy appears to be strengthening, but the international outlook looks tricky to draw any firm conclusion ... It was interesting that the RBA has signalled it was looking at macroprudential moves to help contain the current property exuberance. I still reckon they will stick with simply stepping up its public warnings around housing prices and investor activity. A reasonable conclusion is that Australia is unlikely to introduce the New Zealand style of direct macro prudential controls.” Bill Evans, Westpac
“We do not expect to see the Reserve Bank changing rates anytime over the next year. Indeed, the Bank once again confirmed its intentions in its September board minutes for a period of stability in rates. Westpac expects that, with our expectation of a more favourable economic environment than is anticipated by the Reserve Bank, the next move in rates will be a tightening but not until the second half of 2015, with August currently appearing to be the date for the first move.” Angus Raine, Raine &amp; Horne
“Inflation is still within the acceptable 2-3% range, and unemployment is holding steady at &lt;5%. The RBA wants to see that the employment market has stabilised before it increases rates. Once it sees evidence that the unemployment rate has plateaued, it’s fair to expect that the RBA will begin to tighten monetary policy. The next cash rate change will be impacted by the global geopolitical climate. If tensions worsen in the Middle East and the Ukraine, it might prompt the RBA to hold off, while it will continue to monitor the US and EU recovery or lack thereof.” Grant Harrod, LJ Hooker
“The economy continues to perform as expected by the RBA. Employment and private investment remains the chief concern, however, these should be helped by the recent softening of the Australian dollar. Housing markets continue to remain buoyant with the growth seen in Sydney and Melbourne having a ripple effect out to the other, more affordable, capital city markets. The associated growth in construction is also helping rebalance the economy. However, price growth and investor demand for housing, especially in Sydney and Melbourne, has seen the RBA raise the prospect of introducing macro prudential measures to help de-risk the market.” Shane Oliver, AMP
“While housing related indicators are strong, providing a reason not to cut rates further, the rest of the economy is sub-par. Uncertainty remains high regarding how quickly the mining investment boom will unwind, inflation is benign and the Australian dollar remains too high – all of which suggests it's premature to start raising rates. The most recent commentary from the RBA has indicated that a period of stability in rates remains prudent. This language is likely to be dropped well before the RBA starts hiking rates.” Paul Bloxham, HSBC
“For the moment there's still concern that the labour market has spare capacity, and that they'd like the unemployment rate to be declining before they raise interest rates. By the same token, I don't think they've got scope to cut interest rates any further because the housing market continues to boom.” John Caelli, ME Bank
“We don’t expect interest rates to change in October despite the Australian dollar falling and concerns about rising house prices. The RBA’s key focus remains on providing conditions to support business investment and employment. That the RBA has flagged macro prudential tools to manage house prices suggests they may be considering options to deal with the situation beyond just interest rates. The RBA minutes continue to refer to a period of stability in interest rates and so we expect any rises in rates won’t occur until the first half of 2015.” Nicki Hutley, Urbis
“The balance of macroeconomic indicators suggest that growth has improved in 2014 and is close to trend, but is not yet accelerating sharply enough to concern policy makers. Unemployment and subdued wages will keep inflation from rising too quickly for a little longer ... It is easy to think that, because growth and inflation have been modest for a prolonged period, that they will remain so indefinitely. There is clearly momentum building in the economy however and, notwithstanding slower mining investment, this momentum will lift growth and inflationary pressures over the coming year.” Michael Witts, ING Direct
“The economy is still in transition, and despite the RBA being concerned about the housing market, they would be reluctant to increase rates given the impact on the exchange rate. Also employment data has been highly volatile over the past few months ... The action by the RBA is constrained by the action of US Fed and this will drive local timing. Also the exchange rate is a further constraint, the RBA would like to see the Australian dollar well under 90 US cents.” David Scutt, Independent Market Strategist
“The RBA will keep the cash rate steady at 2.50% in October, the fourteenth-consecutive month that this has occurred. They will keep their neutral bias and communicate that ‘the most prudent course is likely to be a period of stability in interest rates.’ While on the surface the grounds for a return to a hawkish bias seem to be building, most economic indicators have been improving, the Australian Dollar has fallen while unease towards developments in the established housing market is growing, counteracting those forces are real-negative wages growth, subdued business confidence along with a noticeable deterioration in recent Chinese economic data, something that along with recent USD strength has seen the prices for Australia’s key commodity exports fall sharply. Given that household consumption and non-mining investment will be crucial in offsetting the effects of the slowing mining capital expenditure boom in the years ahead, there are simply too many uncertainties at present for the RBA to adopt anything other than a wait-and-see approach. When, and only when, they see non-mining activity start to accelerate sharply will they begin the process of policy normalisation. If that doesn't occur, not my baseline forecast but certainly a possibility, an extended period of policy stability, or even further easing, appears likely.” Source: Finder
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10 expert opinions on interest rates: Reserve Bank Survey

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With no rate hike expected this afternoon, according to Finder’s panel of 28 experts, there is a rate hike expected for the next three years.
The 28 experts surveyed unanimously agreed that there will be no rate change today. However all forecast a rate rise next year and many subsequently pointed to a gradual upward cycle for three years.
When will the hikes begin? June 2015.
{mijopolls 48}
This prediction, from Finder, notes that 46% of experts believe that there is a chance of an increase in the third quarter of 2015.
Here are their predictions:
<img src="/images/2014/10/7/finder1.png" alt="">
Source: Finder
And what will the new normal be?
<img src="/images/2014/10/7/finder2.png" alt="">
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Source: Finder
Money expert for Finder, Michelle Hutchison, said that buyers should be cautious with borrowing levels as a result.
“The finder.com.au Reserve Bank Survey sentiment revealed that many factors will keep the cash rate at the current low level of 2.50%. Inflation being subdued, the low Australian Dollar, and damage to property markets outside Sydney and Melbourne should the cash rate rise too soon.
“However, the good times for property buyers are not expected to last much longer, with our survey showing the next rate rise being forecast for June 2015, and a 21 percent chance that the cash rate will start rising from the first quarter of next year,” she said.
With a gradual increase, 11% of the panel believe the cash rate will hit the historical average of 5%. The majority expect a new normal below 5%.
This is expected to occur by 2016, according to 32% of experts, or 2017, chosen by 29%.
“Only one respondent, Chief Economist at Commonwealth Bank Michael Blythe, is expecting a ‘new normal’ cash rate level to be reached in 2015. The remaining respondents were unable to comment,” she said.
“If you’re an existing home buyer or hitting the property market this mortgage season, make sure you prepare a buffer for when interest rates rise. This is the time when you should be paying as much as you can on your mortgage, to lower the impact of higher rates.”
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Interest rates expected to rise for three years, here’s when the first hike will be: Finder

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Reserve Bank of Australia chief Glenn Stevens has acknowledged the "elevated level of housing prices", as record low interest rates continue for another month.
In a speech made in Adelaide on Wednesday, Stevens noted the prospect of fostering excessive risk-taking behaviour in the financial sector, warning that if people over-commit themselves financially, the economy could be vulnerable to "nasty shocks". 
"It is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that," said Stevens.
According to RP Data, home prices in Australia's capital cities rose by 4.2% in the quarter to August, the highest winter price gain since 2007. The growth was largely driven by Sydney and Melbourne, where median dwelling prices rose by 5.0% and 6.4% respectively.
Unemployment sits at a 12 year high of 6.4%. 
Economists from Australia's major lenders have declared that there is no housing market bubble, others, including AMP Capital chief economist Shane Oliver, also consider Australian housing <a href="/expert-insights/buying/overvalued-housing-price-problem-returns-with-vengeance-amp-capitals-shane-oliver">expensive on a long-term basis</a>. 
Oliver said that the low interest rate climate has been a major factor in recent property growth, and there is potential for interest rates to encourage people to take on an imprudent level of risk.
"There's no doubt that low interest rates are driving the upswing in property prices," said Oliver. "When interest rates are cut, one of the ways that helps the economy is that it forces investors to take their money out of low risk investments like bank deposits, and move it to higher risk investments like housing and shares." 
However, Oliver maintained that Australian's level of financial risk is "not excessive in aggregate".
"The rate of growth in credits in Australia is still quite modest, by the standards of the past," he said, noting the Reserve Bank's credit statistics for July. Overall credit grew by 5.1% in the year to July, with 6.5% growth in housing credit. 
"At a 6.5% year on year rate, it's much lower than the 20% plus growth we saw a decade ago," said Oliver.
The Reserve Bank has maintained a record low overnight cash rate of 2.5% since August 2013, a policy Stevens said "could perhaps be described as boring". 
"If so, I would regard that as a small success," said Stevens, who highlighted the "stability and predictability" of the current interest rate structure.
You may also like to read: <a href="/expert-insights/finance/standby-for-rba-jawboning-on-overheated-sydney-and-melbourne-auction-markets">Standby for RBA jawboning on overheated Sydney and Melbourne auction markets</a>
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Further inflating housing market "unwise": RBA's Glenn Stevens

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Australia's established housing market remained "strong overall", according to the Reserve Bank of Australia.
 The time taken to sell properties and the average size of vendor discounts are at low levels, and auction clearance rates are above average, albeit not as high as late last year, the bank's latest statement of monetary policy advised. 
Stock turnover appears to have increased a bit in the June quarter, though is still a little below average. 
The RBA noted the nationwide rental vacancy rate has been little changed over recent quarters at a relatively low level, but conditions in the rental market appear to have generally eased.
"Rent inflation has declined to its slowest pace since the mid 2000s."
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"Combined with strong growth of housing prices over the past year or so, rental yields have fallen to around their average of the past decade. 
"A strong recovery in dwelling investment is well under way, driven by low borrowing rates, growth of housing prices, significant population growth and a retargeting of government assistance for first home buyers to new homes. 
"Dwelling construction increased by almost 5% in the March quarter to be 8% higher over the year, as the substantial pick-up in residential building approvals over 2013 continued to flow through to activity.
"The increase was driven by a rise in new dwelling construction, particularly for higher- density dwellings. Alterations and additions activity also increased a little in the March quarter, after an extended period of weakness.
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More recently, residential building approvals have declined a little in trend terms, but remain at a high level consistent with further growth of dwelling investment (Graph 3.9 below). The recent trend decline owes mostly to a decline in higher-density approvals from the very high levels seen in late 2013. Approvals for detached houses have trended higher in all mainland states over the past couple of years, notwithstanding a recent decline in South Australia.
<img src="/images/2014/08/08/rba-graph-aug-8-one.jpg" alt="">
 
Other timely indicators of housing construction also point to a sustained recovery in dwelling investment. Loan approvals for new dwellings remained at a high level in May and first home owner grants for new dwellings have increased by 22% over the past year. Liaison reports indicate that demand for new dwellings remains firm, with ongoing strong demand by foreign buyers for inner- city apartments, particularly in Melbourne."
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The statement suggested household wealth has grown strongly over the past 18 months or so, buoyed by higher housing and equity prices and ongoing saving by households, although more recently growth has eased a little.
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 In most of the capital cities, housing price inflation was less rapid over the first half of 2014 than it was over the latter part of 2013.
 While prices appear to have levelled out in Perth and Adelaide, growth has remained relatively strong in Sydney and Melbourne. 
Surveys indicate that, compared with earlier in the year, fewer households expect housing prices to rise over the next 12 months, and households view buying conditions for dwellings as less favourable than they did a year ago," the latest RBA Statement on Monetary Policy suggested.
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It concluded that housing price inflation over 2014 to date has not been as rapid as it was over the second half of 2013, but prices continue to rise. 
"Loan approvals are higher than they were a year ago, but have been little changed since late last year.
"At this level, they are consistent with growth in housing credit stabilising at a rate that is a bit faster than income growth, although the growth of investor credit has continued to outpace that of owner-occupiers.
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"The high rate of housing price inflation has underpinned strong growth in standard measures of household wealth. 
"Along with the very low level of interest rates, this has seen consumption growing a little faster than household income, leading to a gradual decline in the saving rate over the past 18 months or so. 
"Nevertheless, after picking up through 2013, consumption growth looks to have slowed in the first half of this year, with weaker retail sales growth and consumer sentiment falling to below-average levels. 
"It remains to be seen whether this slower growth of consumption is temporary. 
"Indeed, a timely measure of consumer sentiment has rebounded recently to be back above average."
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jchancellor-FAypfDUnLy

Property investors advised rent inflation in decline, yields back to average: RBA

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The RBA's head of financial stability Luci Ellis has repeated the view that Australia's central bank won't be introducing ‘‘macroprudential’’ policy restrictions on higher-risk lending in order to preserve financial stability.
Despite limits on loans with high loan-to-valuation ratios being introduced in Canada, Sweden, Norway, Israel, Korea and Hong Kong, Ellis defended the RBA's caution.
‘‘We view macroprudential policy as something to be subsumed into the broader financial stability framework,’’ Ellis said in a speech to the University of Adelaide Economics Department.
“We recognise that quantitative restrictions were already tried in the 1960s and 1970s – and didn’t always work so well.
‘‘The division between ‘microprudential’ supervision, narrowly focused on individual institutions, and system-wide ‘macroprudential’ supervision, never made much sense to us in Australia.’’
Ellis stressed the central bank’s tools for promoting financial stability were the ‘‘telephone’’, a reference to calling APRA and raising concerns, and the ‘‘microphone’’, a reference to the RBA's public comments.
"Exposing and warning of risks can ideally change behaviour, and steer the system away from higher-risk outcomes," she said.
Her speech follows last week’s warning from APRA which unveiled new draft guidelines on how to manage risks in the mortgage market.
Ellis said APRA and the RBA were already well equipped to promote financial stability.
‘‘The rationale for carving out particular bits of the prudential framework under separate governance – which is what people mean nowadays by ‘macroprudential tools’ – appears to be that supervisors cannot be relied on to discharge their duties with system-level concerns in mind,’’ she said.
‘‘That might be true in some countries, but not in Australia and at least some other countries.’’
In framing the objectives of financial stability policy, Luci Ellis noted whenever housing prices boomed people worried that housing has become unaffordable. 
"Of course, if prices are rising, it must be that someone can afford those prices.
"If they are motivated by speculative expectations, though, prices can run ahead of levels that can be sustained in the longer term.
"So there can be a financial stability angle to those concerns, if a future fallout is likely to harm the real economy, either directly or via distress in the financial system.
"But the real policy concern here is that other people get priced out.
"It is fundamentally a question of distribution, particularly intergenerational distribution.
"This is not in the remit of financial stability policy, and the two goals should not be conflated.
"But we should be mindful of this equally legitimate goal of public policy, which is to ensure that everyone can access appropriate shelter that they can reasonably afford.
"Sometimes this goal mutually supports the goal of financial stability.
"But as we saw in the US housing meltdown, if you get the policy response to an affordability issue wrong, the consequences for financial stability can be dire," she outlined.
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RBA shies away from macroprudential housing policies, but microphone at the ready

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When interest rate change is announced each month, industry members take to the media to share their thoughts on what this means for consumers, home buyers and the property market generally.
If you're looking for <a href="/expert-insights/finance/interest-rates-crash-course-whats-the-relationship-to-the-property-market">a quick crash course in interest rates, and the perspectives around them, then read this article first</a>.
Property Observer has cherry picked some of the industry's <a href="/expert-insights/finance/rba-keeps-interest-rates-on-hold-for-june">responses to the RBA's decision to keep the interest rate on hold in June</a>.
Place Estate Agents CEO -  Damian Hackett (discussing the Brisbane market)
Certainly transactions have been taking place and we are seeing buyers active, but there has also been a bit of negative sentiment lingering in the market.
Keeping interest rates on hold will only strengthen confidence amongst buyers as it improves affordability, and that is the key for activating buyers.
As has been widely reported, Brisbane is currently in a very good position affordability-wise – not only are we yet to see the big price rises experienced by Sydney and Melbourne in recent times, but finance is also very affordable, with interest rates low and banks competing to secure business.
 
Laing+Simmons general manager - Leanne Pilkington
Over the past few days we have been confronted by news stories arguing the property boom is over, that confidence is plummeting and other overly dramatic claims.
Taking a step back, those experienced in the industry know that it's simply business as usual for the housing market.
A slight easing in house prices in May is simply a reflection of the current state of the market, with factors like seasonality and prevailing affordability issues exacerbated by a tough budget playing their part.
A property purchase or sale has always been a major financial decision. However it's also a strictly personal decision, and no amount of market speculation and outspoken commentary should detract from the need for people to carefully weigh up their own needs and financial capacity.
There are still impressive prices being achieved by vendors and buyers continue to enjoy an equal balance of power in negotiations. In short, the market keeps on ticking over and today's rate decision should see this continue over the winter months.
 
1300HomeLoan managing director - John Kolenda
The federal budget and its aftermath haven’t done anything to inspire consumer confidence and the latest data also shows property values nationwide have taken a hit
Under these circumstances the RBA remains justified in staying on the sidelines while the budget is flushed through the system and other economic data is assessed.
It’s still 50/50 going forward on whether the next rate movement from the RBA will be an increase or a reduction.
Whatever happens, we don’t expect any big movement in rates and the current level looks like it's the new norm for the foreseeable future.
 
See the next page for thoughts from REINSW, HIA, Mortgage Choice and RateCity.
 
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REINSW president - Malcolm Gunning
The decision to keep interest rates steady came largely as expected. The budget and the fall in consumer sentiment which followed, coupled with the steading demand for housing and a levelling out of the price spiral, left the Reserve Bank with little choice.
The run of historically low interest rates will come to an end and we encourage those who are thinking of entering the property market to factor this into their budgets
 
HIA chief economist - Harley Dale
Today’s statement conveys the RBA Board has a high degree of comfort with the current cash rate of 2.50 per cent, given an environment where competing factors are influencing Australia’s overall economic performance
A shining light for the Australian economy is the recovery in new residential construction activity.
It is encouraging that today the Bank confirmed the message that interest rates are on hold for a considerable period of time. A period of stability will maintain a positive environment for residential construction activity to boost economic growth throughout 2014 and into next year.
Today’s interest rate statement hopefully reduces the recent elevated level of conjecture, and therefore uncertainty, regarding the direction and timing of the next interest rate move. This uncertainty is itself unhelpful for the sustainability of a residential construction recovery.
 
CEO Rate City - Alex Parsons 
In light of the recent Federal Budget, where frankly, most Australians are going to be worse off, it's great news for mortgage borrowers in that their repayments will be steady for another month.
For many Australians out there, particularly those buying their first home in the east coast city markets it's very difficult to get a foot on the property ladder, and it's likely to get harder as Budget cuts hit the hip pocket.
While that may be surprising for certain people trying to get into the house market, a combination of low interest rates plus income increases over that period of time has caused this impact.
Despite the housing affordability being its best position for the last 12 years, for any Australian out there, particularly buying their first home in the east coast city markets, it's still very difficult.
So my tips for those types of home buyers would be to be wary of interest rates going up in the future. We have record low interest rates today, but make sure that you can afford a 2 percentage point increase in interest rates and still be able to make those repayments. If you can't you'll soon find yourself in mortgage stress and that's not a good place to be.
 
Mortgage Choice spokesperson - Jessica Darnbrough
The latest Westpac Melbourne Institute Index of Consumer Sentiment fell by 6.8% to 92.9 – the lowest level since August 2011.
The sharp fall in sentiment is indicative of an unfavourable response to the recent Federal Budget.
According to the Index, 59.2% of Australians said they expect their family finances to “worsen” over the coming 12 months as a result of the Budget.
In the months leading up to the Federal Budget, many economists had predicted interest rates to rise in the not-too-distant future. However, this may no longer be the case. Instead, the Reserve Bank is likely to leave rates on hold for some time and wait and see what happens to consumer sentiment over the coming months.
In fact, in the minutes of the Reserve Bank's May Board meeting, it was suggested that the current accommodative stance of monetary policy was appropriate for some time yet given the current outlook for the economy and the significant degree of monetary stimulus already in place.
 
See the next page for comments provided on the day of the RBA decision from RP Data, Finder and L J Hooker.
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Comments provided on the day
RP Data research director - Tim Lawless
From a housing market perspective, the Reserve Bank should be less concerned about housing markets overheating, with RP Data yesterday reporting the first fall in dwelling values in a year over the month of May and the trend rate of growth across the housing market has been cooling. Australia’s housing market has seen two years of escalating property values, so from a cyclical perspective the housing market is due for a slowdown.  Cooler housing market conditions shouldn’t surprise the Reserve Bank, who have been warning about overheated conditions and speculative investment activity in the Melbourne and Sydney markets. 
Gross rental yields in both these cities have fallen to near historic lows as value growth has substantially outpaced rental growth.  With the heat potentially coming out of the housing market, the RBA will find it much easier to keep interest rates at their low setting in an effort to continue stimulating housing construction and consumer spending. Add to the recently weak housing market a stubbornly high Australian dollar, lower commodity prices, slowing dwelling approvals and weaker consumer sentiment post budget and it’s clear that the RBA is likely to hold off on rate hikes for the foreseeable future.
 
Finder money expert - Michelle Hutchison
Despite new figures showing a month-on-month drop in property prices across the country, property values are much higher than ever. In fact, our research shows that national average (across five capital cities) property prices have increased by over $133,000 or up 27% to $628,320 (RP Data). 
If you waited for a property to drop before buying, interest rates could rise and outweigh the benefit of waiting. Australia's biggest Reserve Bank survey of leading economists and experts all expected the cash rate to remain unchanged today but the majority predict a rate rise by the end of the year or next year. If you waited a few months for a $500,000 property to drop by 4% to $480,000, with a 10% deposit and a loan size of $432,000, the lowest three-year fixed rates could rise by then to 5.19%. If you purchased a property now at $500,000 and a 10% deposit and loan size of $450,000, locking in the cheapest three-year fixed rate of 4.69% could save you about $1,400 over 3 years compared to waiting for property prices to drop and rates to potentially increase.
 
L J Hooker deputy chair - L Janusz Hooker
Looking forward, the only hiccup appears to be the uncertainty surrounding which federal budget measures will pass parliament.
Initially this caused a drop in consumer confidence but that appears to have passed.
The good news for home owners is the longer this uncertainty remains in place the longer interest rates will remain on hold.
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Industry perspectives on the RBA’s interest rate hold

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The Reserve Bank of Australia (RBA) has again chosen to keep the overnight cash rate at its record low level of 2.5%. The cash rate has not moved since August 2013.
The decision was widely anticipated by property industry commentators, with 16 surveyed industry experts recently <a href="/expert-insights/finance/16-experts-predict-no-change-from-rba-tomorrow">predicting the cash rate would stay on hold</a>.
RP Data’s research director Tim Lawless says that recent results in the property market provide a backdrop for the RBA’s decision.
“From a housing market perspective, the Reserve Bank should be less concerned about housing markets overheating, with RP Data yesterday reporting the first fall in dwelling values in a year over the month of May and the trend rate of growth across the housing market has been cooling,” he says.
“Australia’s housing market has seen two years of escalating property values, so from a cyclical perspective the housing market is due for a slowdown.  Cooler housing market conditions shouldn’t surprise the Reserve Bank, who have been warning about overheated conditions and speculative investment activity in the Melbourne and Sydney markets.”
According to Lawless, the current housing market will encourage the RBA to keep rates low for now.
“Gross rental yields in both these cities have fallen to near historic lows as value growth has substantially outpaced rental growth.  With the heat potentially coming out of the housing market, the RBA will find it much easier to keep interest rates at their low setting in an effort to continue stimulating housing construction and consumer spending.
“Add to the recently weak housing market a stubbornly high Australian dollar, lower commodity prices, slowing dwelling approvals and weaker consumer sentiment post budget and it’s clear that the RBA is likely to hold off on rate hikes for the foreseeable future,” said Lawless.
Property Observer’s Jonathan Chancellor agrees, writing yesterday that the <a href="/expert-insights/finance/last-months-price-growth-dip-the-first-since-may-2013-so-rba-will-be-content">Reserve Bank will be content with a slight dip in home values</a> over May. 
LJ Hooker deputy chair L Janusz Hooker said today’s decision is unsurprising given the stability of the economy.
"Looking forward, the only hiccup appears to be the uncertainty surrounding which federal budget measures will pass parliament," said Hooker.
"Initially this caused a drop in consumer confidence but that appears to have passed.
"The good news for home owners is the longer this uncertainty remains in place the longer interest rates will remain on hold."
Hooker predicts that the economy’s movement away from the mining sector will lead to future rate increases, but probably not until the end of this year or the beginning of 2015.
Michelle Hutchison of finder.com.au says that while interest rates are low, buyers shouldn’t wait for property prices to drop before investing.
"While there was no change to the cash rate today, interest rates are set to rise so it's a good time to consider locking in a fixed interest rate,” says Hutchison.
“For first home buyers, don't wait for property prices to fall as rising interest rates could outweigh the benefit of a cheaper property,” she says.
Low interest rates and slowing property price appreciation have made <a href="/expert-insights/finance/thanks-to-low-interest-rates-affordability-at-highest-level-for-over-a-decade-hia-cba-index">housing more affordable at a national level</a> than it has been for more than a decade, according to the March 2014 quarter HIA-CBA Housing Affordability Index, released last week.
For more on how to take advantage of low rates and prepare for a rise, <a href="/expert-insights/finance/how-to-prepare-for-an-interest-rate-increase">click here</a>.
 
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RBA keeps interest rates on hold for June

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The Reserve Bank of Australia’s head of financial stability Luci Ellis offered her thoughts on Australia’s housing markets in a speech last month entitled Space and Stability: Some Reflections on the Housing-Finance System. 
In the speech, Ellis noted increasing coverage of housing markets in conversations about financial stability around the world. She urged her audience to remember residential are physical structures, located on fixed pieces of land, and emphasised the importance of urban structures to financial stability.
Here are five main points to take away from her speech:
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Jobs are becoming more centralised “Jobs are concentrated in the central business districts and the areas immediately surrounding them,” noted Ellis. “The power of the central place is even more striking if we directly contrast where the jobs are with where the employed people live,” she said, with reference to the graph below, which shows the ratio of jobs in an area to employed people living there. <img src="/images/2014/06/02/sp-so-150514-graph7-small.gif" alt=""> “Places with ratios well above 1 are employment centres, attracting commuters from elsewhere in the city, or even from outside its limits. Places with ratios well below 1 are the commuter districts, the dormitory suburbs,” she explained. “As you can see, there are factory districts away from the CBD, especially in Melbourne, and office parks on the way out to Macquarie University in Sydney. But in all of these cities, the CBD is still the job magnet.” 
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Residences are densest around the CBD “The pattern of residence is similar, though not quite as pronounced,” said Ellis. “Population density is higher near the centres and declines rapidly.” “Some of the outermost districts still contain agricultural land and a good fraction of national parks, so it isn't surprising that population densities are low in these places. I find it interesting that even some middle-ring districts are not that much denser,” she said. She noted a trade-off between space and travel time, with  
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…And that isn’t changing. “Part of the reason for the higher population density closer to the centre is historical. The inner parts of cities are older, built when we had to live more compactly. As incomes rose, people wanted bigger, nicer homes. As cars became more common, the cost of locating further out declined, and it became feasible to have those bigger homes,” said Ellis. “So newer homes further out tended to be bigger and sit on bigger blocks of land. Some of the older homes get renovated to be consistent with our higher modern incomes and aspirations. “But we don't see much expansion of block sizes in the inner areas. The land parcels stay small. Sure, it would be a legal hassle to consolidate land titles like that, but people generally don't even try. That is because they are trading off space against price and distance.” 
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<li>
The pattern is making non-capital city growth difficult Although some might expect that remote working would rise with the use of the internet, Ellis explained that “jobs are showing even greater tendency to congregate in existing centres.” And this is halting the expansion of regional areas." “I also can't help noticing how difficult it seems to grow the smaller cities in this country relative to the bigger cities. With the possible exceptions of Newcastle, Geelong and maybe Bendigo and Ballarat, few centres outside the state capitals have many corporate headquarters or other job magnets. These self-sustaining job magnets seem to be necessary to create the variety of job opportunities that would attract large numbers of former city dwellers. “Over recent years at least, these smaller centres had rates of employment growth and changes in employment-to-population ratios that were similar to or a little below those in the big cities, and a bit below those of inner-city areas,” noted Ellis. “At this rate, it will be hard for the smaller centres to start catching up with the bigger cities, relatively speaking. That means that if big-city housing prices should rise too high for some residents, smaller cities cannot provide alternative locations that are any more viable than they are today." 
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<li>
The dream of a backyard and picket fence may not be for everyone…but neither is the highrise. In her speech, Ellis said Australian cities should diversify the range of dwellings available, to ease financial and social pressures on Australians. “As a mode of living, low-density suburbia has its advantages,” said Ellis. But it does mean that distances are greater and almost every trip requires a car. The only alternative offered at the time of our first mass suburbanisation seemed to be the ‘tower in the park’, Le Corbusier's utopian dream of apartment living. But the reality turned out to be a nightmare of social isolation for the public housing tenants in those developments." She didn't advocate an end to low density detached housing, but instead said that a greater range of choices would help ensure financial stability for buyers. “I'm hopeful that the future brings Australians a wider range of places they would be happy to move to; different housing types for different family sizes and life stages; and a greater confidence that centres outside state capitals can offer the strong job markets and scope for entrepreneurship people need, and housing at a price they can better afford.  “That way, people can see an upswing in housing prices in the larger centres and say, ‘I don't have to buy into that. I don't have to stretch my finances’,” said Ellis.  “Australian household finances are not looking that stretched at the moment, and we'd like to see it stay that way.” 
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In the same speech, she urged first home buyers <a href="/expert-insights/finance/disheartened-fhbs-warned-not-to-overstretch-home-loan-borrowings-rbas-luci-ellis">not to over commit themselves with large home loans</a>. The Reserve Bank of Australia will make its June cash rate announcement tomorrow. 
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Five thoughts on the property market from the RBA

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Growing demand for housing close to inner city areas was the topic of a recent speech by The Reserve Bank’s (RBA) head of financial stability, Luci Ellis.
Entitled ‘Space and Stability: Some Reflections on the Housing-Finance System’, Ellis made some valid points relevant to the housing market in her speech.
Ellis’ speech goes some way to explaining why detached housing closer to the centre of a city is much more expensive than for those suburbs located further away. Put simply, Ellis noted in her speech that housing in these areas is in short supply and with high demand due to its convenience to major working nodes. 
Several key points made on housing within the speech were:
<ul>
<li>Housing prices in the inner-ring are becoming more expensive than those in outer areas of our capital cities;</li>
<li>The availability of jobs is becoming even more centralised, particularly within already established working nodes;</li>
<li>There are minimal jobs outside of city areas; it is becoming increasingly difficult to grow smaller cities and few centres outside of the capital cities have job magnets. Given this, when residents are priced out of capital cities and more affordable regional housing options are not a viable alternative.</li>
</ul>
A rise in the popularity of inner-city unit living is driven by a desire to live closer to the city centre at a lower cost than detached housing. Australia has comparatively low density cities with significant price premiums in the most convenient areas of the city.
Ellis’ speech noted that if housing costs rise beyond people's comfort levels, it is not always feasible or attractive for households to respond by moving to cheaper areas, especially if the more affordable options are further away from their place of employment.
The RBA is hopeful that over time the structure of our cities is such that home owners will have more options as to where they can live, rather than having to live in expensive housing closer to working nodes such as current policies often necessitate.
With plenty of commentary around on some of the best performing areas around the country, it’s important to note that this analysis is typically undertaken over a relatively short-time frame of around 10 years, and where it is often reported that new greenfield areas and regional housing markets are better for capital growth than inner city areas.
The nature of new greenfield developments, both within a capital city and in regional areas, can lift prices in these areas from a very low starting point to a much higher new base as the area sees an influx of new modern housing. While over a shorter time frame this may result in heightened levels of median price increases, this is typically a relatively short-term phenomenon.
It also compares to the shift from a much lower quality initial housing product to a far superior newer housing supply.
Below is a list of suburbs that have recorded the largest rise in median selling prices over a 10 year and a 20 year timeframe. Interestingly, Miles and Chinchilla in regional Queensland are the only regional suburbs listed. Elsewhere, the list is dominated by a collection of the most desirable inner city suburbs in Sydney, Melbourne and Brisbane - all with high median prices, and all relatively close to major working nodes .
<img src="/images/2014/05/29/kusher-may-29-chart-one.gif" alt="">
With the population continuing to grow and housing supply insufficient we would expect that inner-city houses will continue to be the best performed over the long-term with significant demand and a short supply available.
Note: Median prices are not the most appropriate measure of a market change because these don’t continually measure the change across the same collection of properties. Median prices look at those properties that transaction over specific periods (which may be dramatically different each year).
The table above shows a strong bias towards regional areas of the country over a shorter time frame, particularly those linked to the resource sector. The rate of compound growth over the 10 years is much higher than those in the second table which looks at the 20 year period and reflects the boom in the mining sector over recent years.
The table below supports comments from the RBA with the list dominated by inner city suburbs.
<img src="/images/2014/05/29/kusher-may-29-chart-two.gif" alt="">
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